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Thursday, 24 May 2012, 21:30 HKT/SGT
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Source: Kingsoft Corporation Limited
Kingsoft Announces 2012 First Quarter Results
Steady Growth For Revenue And Profit With Continued Effort to Improve Products and Enhance User Experiences

HONG KONG, May 24, 2012 - (ACN Newswire) - Kingsoft Corporation Limited ("Kingsoft" or the "Company"; SEHK: 3888), a leading entertainment software, Internet security and application software developer, distributor and service provider in the PRC, announced its unaudited first quarter results for the three months ended 31 March 2012.

During the period under review, Kingsoft recorded an increase in both revenue and profit compared with the corresponding period last year. Revenue increased by 27% year-over-year to RMB292.6 million and gross profit increased by 22% year-over-year to RMB242.9 million. Profit attributable to owners of the parent increased by 31% year-over-year to RMB87.5 million. Revenue from the entertainment software business and the application software business represented 65% and 31% respectively of total revenue in the first quarter. As at 31 March 2012, cash and cash equivalent amounted to RMB2.01 billion.

Dr. HongJiang Zhang, Chief Executive Officer, commented, "We are pleased to report a solid first quarter of 2012 with revenue posted a steady growth of 3% quarter-over-quarter and a considerable growth of 27% year-over-year. The Company's operating profit margin continued to improve from 25% in last quarter to 29% this quarter end and our quarterly bottom line also recorded a quarter-over-quarter growth of 18% and year-over-year growth of 32%, respectively."


FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------
RMB'000                  For the 3 months ended March 31     Change
(unaudited)                           2012          2011        (%)
--------------------------------------------------------------------
Revenue                            292,585       231,276       27%
--------------------------------------------------------------------
-Entertainment software            191,090       163,376       17%
--------------------------------------------------------------------
-Applications software              90,754        67,900       34%
--------------------------------------------------------------------
-Others                             10,741           -          -
--------------------------------------------------------------------
Profit Attributable to
 Owners of the Parent               87,526        66,894       31%
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Basic EPS (RMB Cents)                 7.68          5.97       29%
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OPERATIONAL HIGHLIGHTS OF ONLINE GAMES
--------------------------------------------------------------------
                                  March 31      Dec 31    March 31
                                      2012        2011        2011
--------------------------------------------------------------------
Daily Av. Peak Concurrent Users    631,485     661,774     684,023
--------------------------------------------------------------------
Monthly Average Paying Users     1,330,868   1,326,071   1,258,525
--------------------------------------------------------------------
Monthly Average Revenue per
     Paying User (RMB)                  47          47          43
--------------------------------------------------------------------

BUSINESS REVIEW

Entertainment Software Business

Revenue from the entertainment software business in the first quarter increased 17% year-over-year to RMB191 million. The increase was primarily due to the climbing popularity of JX Online III. In the first quarter, the existing games continued to show enhanced performance, particularly the Company's major 3D MMO JX Online III, which has been ramping up since the launch of the expansion pack The Grand Master in November 2011. The new expansion pack, Light Up The Fire, for JX Online III with expanded and fun-to-play dodge features was launched in April 2012, which has stimulated the popularity of the game. Also, the expansion pack Hedric-Western Dragon for JX Online World was launched in March 2012 to retain the existing gamers and attract former players back. New servers of Legend of Moon were opened in April and the new game title is now under its last-round unlimited closed beta test.

Internet Security Service and WPS Office Software

In the first quarter, the active users of Kingsoft Internet Security continued to grow, and the advertising revenue from Kingsoft Internet Security was gaining momentum. In May, the first internet browser from Kingsoft, Cheetah, was released for beta test. The dual-core internet browser differentiates itself from its competitors by speed, security, and UI design. It integrates both Chrome and IE cores, and for the first time introduces intrusion prevention system supported by the Company's proprietary cloud-based internet security technology. It has received overwhelmingly positive feedbacks since its beta release. The release of the browser will further enrich the product line of Kingsoft and help to cultivate the broad and active user base, and enable the Company to further improve the monetization capability.

During the period under review, revenue from the application software business increased by 34% year-over-year to RMB90.8 million. The increase was primarily driven by the strong sales from Kingsoft WPS Office.

The active user base of Kingsoft WPS Office continued to expand in the first quarter. Due to the seasonality effect, the top line of Kingsoft WPS Office reported quarter-over-quarter decrease of 16% but with year-over-year increase of 190% to RMB41.1 million. The year-over-year growth has demonstrated the strong momentum of Kingsoft WPS Office, benefiting from the improved awareness of copyright protection and the continued improvement of WPS Office product.

In the past quarter, the Company has announced the establishment of Kingsoft Cloud, a new business division that focuses on providing cloud storage services to consumers and enterprises. This will be a long term investment for Kingsoft. The users of the Company's services have grown to over ten million as we continue to improve our products and user experiences. In February, Kingsoft Japan launched Android pad in the Japanese market and gained positive feedbacks. The company believes this move will be conducive to the expansion of Kingsoft Software's market share in Japan.

Dr. Zhang, Chief Executive Officer of Kingsoft, concluded, "For the latest two quarters, our matured business including online games, anti-virus and WPS have achieved outstanding performance with enhanced user activeness, launch of new versions and upgrades in user interface designs. These products have fully demonstrated the speediness and characteristics of internet based applications. Kingsoft has pushed forward mobile internet applications in all of its product lines and launched the iOS and Android Apps, some of which have made to the top of the user download ranking. This has brought us new development opportunities. The launch of our new internet browser, Cheetah would help Kingsoft to complete its product line and cultivate a boarder and more active user base which bring a promising future. Looking forward, we will ensure the development of our matured business while making bold steps forward in developing new businesses in order to prepare ourselves for the new rounds of opportunities brought about by the new trends of mobile internet and cloud computing."

Contact:
Kingsoft Corporation Limited
Ms. Michelle Feng Harnett 
Tel: +86 10 82325515
Email: ir@kingsoft.com


Topic: Earnings
Source: Kingsoft Corporation Limited

Sectors: IT Individual, eSports, Gaming
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